WALTHAM, Mass.--(BUSINESS WIRE)--A123 Systems, Inc., (“A123” or “the Company”), a developer and
manufacturer of advanced Nanophosphate® lithium iron phosphate batteries
and systems, today announced that it has received approval from United
States Bankruptcy Court for the District of Delaware (the “Court”) to
sell substantially all of A123’s assets to Wanxiang America Corporation
(“Wanxiang”). The Court has also granted approval for A123 to sell its
government business to Navitas Systems.

“We believe an acquisition by Wanxiang will provide A123 with
the financial support necessary to strengthen our competitive position
in the global vehicle electrification, grid energy storage and other
markets, and we look forward to completing the sale.”

As previously announced, A123 and Wanxiang have agreed to terms on an
asset purchase agreement through which Wanxiang would acquire
substantially all of A123’s assets for $256.6 million. The sale is
subject certain closing conditions, including approval from the
Committee for Foreign Investment in the United States (CFIUS). Excluded
from the asset purchase agreement with Wanxiang is A123’s Ann Arbor,
Mich.-based government business, including all U.S. military contracts,
which would be acquired for $2.25 million by Navitas Systems through a
separate asset purchase agreement.

“Receiving Court approval of our asset purchase agreement with Wanxiang
and Navitas is an important step toward finalizing the sale of A123’s
assets, and we are now focused on CFIUS approval of the sale to
Wanxiang, which we are confident that we will receive given the
structure of this transaction,” said Dave Vieau, Chief Executive Officer
of A123. “We believe an acquisition by Wanxiang will provide A123 with
the financial support necessary to strengthen our competitive position
in the global vehicle electrification, grid energy storage and other
markets, and we look forward to completing the sale.”

Additional information is available on A123’s website at www.a123systems.com
or by calling A123’s Restructuring Hotline, toll-free in the U.S., at
1-800-224-7654. For calls originating outside the U.S., please dial +1
973-509-3190. Court documents and additional information can be found at
a dedicated website administrated by the Company's Claims Agent, Logan &
Company: www.loganandco.com.

About A123 Systems

A123 Systems, Inc. is a leading developer and manufacturer of advanced
lithium-ion batteries and energy storage systems for transportation,
electric grid and commercial applications. The company's proprietary
Nanophosphate® lithium iron phosphate technology is built on novel
nanoscale materials initially developed at the Massachusetts Institute
of Technology and is designed to deliver high power and energy density,
increased safety and extended life. A123 leverages breakthrough
technology, high-quality manufacturing and expert systems integration
capabilities to deliver innovative solutions that enable customers to
bring next-generation products to market. For additional information
please visit www.a123systems.com.

Safe Harbor Disclosure

This press release includes forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended that are
subject to risks, uncertainties and other important factors, including
statements with respect to the expected benefits of the Wanxiang
purchase agreement and the proposed asset sales, the potential of the
transactions to create value for A123 and its stakeholders, the
satisfaction of conditions to closing of the transactions, and the
necessity of bankruptcy court and other approvals and consents,
including antitrust and other regulatory approvals, to close the
transactions contemplated by Wanxiang purchase agreement. Among the
factors that could cause actual results to differ materially from those
indicated by such forward-looking statements are: failure to obtain
required CIFIUS and other required approvals, failure to satisfy the
conditions to closing of the transactions, delays in the development of
A123's products, adverse economic conditions in general and adverse
economic conditions specifically affecting the markets in which A123 and
Wanxiang operate, and other risks detailed in A123 Systems' quarterly
report on Form 10-Q for the quarter ended June 30, 2012 and other
publicly available filings with the Securities and Exchange Commission.
All forward-looking statements reflect A123's expectations only as of
the date of this release and should not be relied upon as reflecting
A123's views, expectations or beliefs at any date subsequent to the date
of this release.